Macquarie has downgraded Mankind Pharma to ‘Underperform’, slashing its target price by 7% to ₹2,150, indicating a potential downside of 20% from the current market price (CMP) of ₹2,700.00. The downgrade reflects concerns over slowing growth in the domestic formulations segment and challenges linked to recent acquisitions.
Key Insights:
- Weak Domestic Growth:
- Domestic formulations, which account for ~65% of revenue, are seeing slower growth, especially in acute therapies.
- Impact of Acquisitions:
- The Bharat Serum and Vaccine (BSV) acquisition adds to top-line growth but adversely impacts bottom-line performance, leading to earnings dilution.
- Export Concerns:
- Macquarie flagged that exports might have peaked, creating additional headwinds for growth.
- Earnings Outlook:
- Earnings estimates for FY25/26/27 have been reduced by 17%/24%/17%, driven by the impact of the BSV acquisition.
CMP and Target:
- Current Market Price (CMP): ₹2,700.00
- Target Price (TP): ₹2,150.00
- Downside Potential: 20%
Conclusion:
Macquarie’s bearish outlook on Mankind Pharma stems from structural challenges in its domestic business and risks related to acquisitions. Investors are advised to monitor the stock’s performance in light of these developments.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult financial advisors before making investment decisions.
